Major HVAC manufacturers accused of price-fixing conspiracy in lawsuit

A proposed federal class-action lawsuit alleges that major HVAC manufacturers have conspired to fix prices and overcharge for equipment since January 2020, exploiting the COVID-19 pandemic and the A2L transition.

“These Defendants are alleged to have driven HVAC equipment prices to historic levels through a series of frequent and repeated secret meetings, information sharing, communications, and public signaling,” a law firm involved in the case writes. 

State of play: The complaint, filed March 20 in a federal court in Michigan, names Minnesota resident Alyssa Berg as the lead plaintiff, and targets Bosch, Carrier, Daikin, Lennox, Rheem, Trane, and AAON, which “control over 90% of the market for HVAC equipment in the United States,” according to the filing. It also names AHRI and ACHR News as “co-conspirators.”

What’s happening: Since 2020, the defendants have used AHRI, including its in-person events, to share pricing information and “otherwise monitor and enforce their conspiracy,” the complaint alleges, noting that AHRI’s board of directors is and has been largely comprised of executives from the defendant manufacturers. 

• The complaint adds that the manufacturers have “extensively and nearly exclusively” relied on ACHR News to disseminate their price increase announcements, using the publication “to signal to one another to perpetuate the conspiracy and communicate their adherence to it.”
• It details price hikes enacted by each manufacturer from 2020 to March 2026, alleging they used Covid as a “boogeyman” for initial justification, and later the A2L transition as “further cover and pretext.”

“We consistently get press releases from manufacturers, distributors, associations, and contractors,” Kyle Gargaro, editorial director of ACHR News, told Homepros in an email. “It is our job to decide what is newsworthy for our audience. Nobody outside of The ACHR NEWS makes that decision for us.”

• A representative for AHRI declined to comment.

What they’re saying: “We’ve had cost inputs coming into our business… and we’re gonna continue to increase our pricing to maintain our margins,” Lennox CFO Michael Quenzer said at a February investor conference. “I think others have generally been as well. You know, we, as an industry, have realized that… pricing… taking it away, does not win market share.”

• Quenzer’s comments, the complaint argues, acknowledge that “Lennox and its competitors would no longer compete for market share by, for example, lowering prices to win customers from competitors, which is inconsistent with the behavior of competitors in a market free from an anticompetitive agreement.”

Zoom out: Before 2020, the suit asserts, HVAC equipment generally experienced “stable and small” price increases, as measured by an HVAC-specific producer price index (PPI), and consistently tracked the consumer price index (CPI), the primary gauge of inflation. 

• “That all began to change in January 2020, when Defendants launched their conspiracy,” it says. “The fruit of their efforts became increasingly apparent as the spread between the HVAC PPI and the CPI grew exponentially.” 
• The filing includes an analysis, conducted by the plaintiff’s experts, aimed at isolating the price effects of the alleged conspiracy from cost factors “unrelated to collusion” — and estimates an eight percent overcharge since January 2020. 

Yes, but: “We deny the allegations in the complaint and look forward to defending ourselves through the legal process,” a Rheem spokesperson told Homepros. “We take these matters seriously, but as this is ongoing litigation, we will not comment further at this time.” 

• Of note: A lawsuit must meet certain legal requirements to be certified as a class action, and while groups of people can use such suits to band together against large companies, critics say they can also be subject to abuse, potentially pressuring defendants to settle claims with little legal merit.
• Additionally, antitrust law distinguishes between “conscious parallelism” — when competitors independently match each other’s pricing, which is legal — and illegal price-fixing, which requires advance agreement among competitors. To avoid dismissal, the court will require evidence of the latter.  
• A 2022 analysis of antitrust class-action cases found that when parties file a motion to dismiss, courts grant it roughly 50 percent of the time. 

Looking ahead: The manufacturers haven’t yet filed responses in court. 

• The plaintiff is seeking monetary damages, as well as equitable relief, on behalf of anyone who purchased HVAC equipment from the defendants for residential or commercial end use in the U.S. since January 2020. 
• Representatives for Bosch and Trane declined to comment, and the remaining defendants, along with attorneys at two law firms representing the plaintiff, didn’t return Homepros’ requests for comment.

— With assistance from Alec Stevanovski

Editor’s note: This article has been updated to reflect a statement from ACHR News.